Qatar slashes gas price for India, waives penalty

Updated: Thursday, December 31, 2015, 16:29 [IST]

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New Delhi, Dec 31: Qatar has agreed to lower the price of gas it sells to India on a long-term contract by about USD 6 billion to reflect the slump in global energy rates and also waived the Rs 12,000-crore penalty for 'short-lifting' in 2015.

The revised formula will base the price on a three-month average figure of Brent crude oil, replacing a five-year average of a basket of crude imported by Japan, with a rider that PLL buys an additional 1 million tonnes of LNG annually.

The trailing three-month average Brent price is about USD 44 a barrel while the average of Japan Crude Cocktail for the 5-year period ended September 30 was USD 94.

Pradhan said Qatar will also not seek Rs 12,000 crore from PLL for 'under-lifting' LNG from RasGas by 32 per cent. The value of the under-lifted cargoes in 2015 is Rs 12,000 crore and if the change-to-price formula was implemented, it would suggest a USD 2.5 billion buyer saving over three years.